# Mirion Technologies, Inc.: Form 10-Q for the period ended Mar 31, 2022

- Company: [Mirion Technologies, Inc.](/companies/mir.md) (CIK 1809987)
- Form: 10-Q
- Filed: 2022-05-05
- Accepted by EDGAR: May 4, 2022, 20:17 ET
- Period: 2022-03-31
- Accession: 0001628280-22-012399
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1809987/000162828022012399/mir-20220331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1809987/000162828022012399/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2022-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2022-01-01 to 2022-03-31 | $163.2m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2022-01-01 to 2022-03-31 | $98.8m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2022-01-01 to 2022-03-31 | $64.4m | us-gaap:GrossProfit |
| Research and development | 3 months, 2022-01-01 to 2022-03-31 | $7.1m | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2022-01-01 to 2022-03-31 | $90.9m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2022-01-01 to 2022-03-31 | −$33.6m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2022-01-01 to 2022-03-31 | −$4.1m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2022-01-01 to 2022-03-31 | −$17.7m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2022-01-01 to 2022-03-31 | −$0.10 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2022-01-01 to 2022-03-31 | −$0.10 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2022-01-01 to 2022-03-31 | 180,774,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2022-01-01 to 2022-03-31 | $11.4m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2022-01-01 to 2022-03-31 | $8.7m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2022-03-31 | $84.2m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2022-03-31 | $436.5m | us-gaap:AssetsCurrent |
| Total assets | at 2022-03-31 | $3.05bn | us-gaap:Assets |
| Current liabilities | at 2022-03-31 | $213.4m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2022-03-31 | $1.29bn | us-gaap:Liabilities |
| Long-term debt | at 2022-03-31 | $805.5m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2022-03-31 | $5.2m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2022-03-31 | $1.67bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 66,726 characters.

*You should read the following discussion and analysis of Mirion’s financial condition and results of operations together with the consolidated financial statements and related notes of Mirion Technologies, Inc. that are included elsewhere in this Quarterly Report on From 10-Q as well as our audited statements and the notes related thereto for the year ended December 31, 2021 that are included in our Annual Report on Form 10-K. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the section entitled “Risk Factors” included in this Quarterly Report on Form 10-Q as well as Annual Report on Form 10-K. Unless the context otherwise requires, references in this section to “we,” “us,” “our,” “Mirion” and “the Company” refer to the business and operations of Mirion Technologies TopCo, Ltd. and its consolidated subsidiaries prior to the Business Combination and to Mirion and its consolidated subsidiaries, following the consummation of the Business Combination. Unless the context otherwise requires or unless otherwise specified, all dollar amounts in this section are in millions.*

### Overview

We are a global provider of products, services, and software that allow our customers to safely leverage the power of ionizing radiation for the greater good of humanity through critical applications in the medical, nuclear and defense markets, as well as laboratories, scientific research, analysis, and exploration.

We provide dosimetry solutions for monitoring the total amount of radiation medical staff members are exposed to over time, radiation therapy quality assurance solutions for calibrating and verifying imaging and treatment accuracy, and radionuclide therapy products for nuclear medicine applications such as shielding, product handling, medical imaging furniture, and rehabilitation products. We provide robust, field-ready personal radiation detection and identification equipment for defense applications and radiation detection and analysis tools for power plants, labs, and research applications. Nuclear power plant product offerings are used for the full nuclear power plant lifecycle including core detectors, essential measurement devices for new build, maintenance, decontamination and decommission, and equipment for monitoring and control during fuel dismantling and remote environmental monitoring.

We manage and report results of operations in two business segments: Medical and Industrial.

- Our revenues were $163.2 million for the three months ended March 31, 2022 and $166.2 million for the three months ended March 31, 2021, of which 36.8% and 31.0% was generated in the Medical segment for the three months ended March 31, 2022 and March, 31, 2021, respectively, and 63.2% and 69.0% was generated in the Industrial segment for the three months ended March 31, 2022 and March 31, 2021, respectively.
- Backlog (representing committed but undelivered contracts and purchase orders, including funded and unfunded government contracts) was $753.5 million and $747.5 million as of March 31, 2022, and December 31, 2021, respectively.

### The Mirion Business Combination

The Business Combination closed on October 20, 2021 (the “Closing Date”), and GS Acquisition Holdings Corp II ("GSAH") was renamed Mirion Technologies, Inc. Our Class A common stock is listed on the NYSE under the ticker symbol “MIR.”

The Business Combination has been accounted for under ASC 805, Business Combinations. GSAH has been determined to be the accounting acquirer. Mirion constitutes a business in accordance with ASC 805 and the Business Combination constitutes a change in control. Accordingly, the Business Combination has been accounted for using the acquisition method. Under this method of accounting, Mirion is treated as the “acquired” company for financial reporting purposes and our net assets are stated at fair value, with goodwill or other intangible assets recorded.

As a result of the Business Combination, Mirion’s financial statement presentation distinguishes Mirion TopCo as the “Predecessor” for periods prior to the closing of the Business Combination and Mirion Technologies, Inc. as the “Successor” for periods after the closing of the Business Combination. As a result of the application of the acquisition method of accounting in the Successor Period, the financial statements for the Successor Period are presented on a full step-up basis as a result of the Business Combination, and are therefore not comparable to the financial statements of the Predecessor Period that are not presented on the same full step-up basis due to the Business Combination.

### Key Factors Affecting Our Performance

We believe that our business and results of operations and financial condition may be impacted in the future by various trends and conditions, including the following:

- **Global risk—**Our business depends in part on operations and sales outside the United States. Risks related to those international operations and sales include new foreign investment laws, new export/import regulations, and additional trade restrictions (such as sanctions and embargoes). New laws that favor local competitors could prevent our ability to compete outside the United States. Additional potential issues are associated with the impact of these same risks on our suppliers and customers. If our customers or suppliers are impacted by these risk factors, we may see the reduction or cancellation of customer orders, or interruptions in raw materials and components.
- **Tariffs or Sanctions—**The United States imposes tariffs on imports from China and other countries, which has resulted in retaliatory tariffs and restrictions implemented by China and other countries. There are, at any given time, a multitude of ongoing or threatened armed conflicts around the world. As one example, sanctions by the United States, the European Union, and other countries against Russian entities or individuals related to the Russia-Ukraine conflict, along with any Russian retaliatory measures could increase our costs, adversely affect our operations, or impact our ability to meet existing contractual obligations.
- **Medical end market trends—**Growth and operating results in our Medical segment are impacted by:
- Changes to global regulatory standards, including new or expanded standards;
- Increased focus on healthcare safety;
- Changes to healthcare reimbursement;
- Potential budget constraints in hospitals and other healthcare providers;
- Medical/lab dosimetry growth supported by growing and aging demographics, increased number of healthcare professionals, and penetration of radiation therapy/diagnostics; and
- Medical radiation therapy quality assurance (“RT QA”) growth driven by growing and aging population demographics, low penetration of RT QA technology in emerging markets, and increased adoption of advanced software and hardware solutions for improved outcomes and administrative and labor efficiencies.
- **Business combinations—**A large driver of our historical growth has been the acquisition and integration of related businesses. Our ability to integrate, restructure, and leverage synergies of these businesses will impact our operating results over time.
- **Environmental objectives of governments—**Growth and operating results in our Industrial segment are impacted by environmental policy decisions made by governments in the countries where we operate. Our nuclear power customers may benefit from decarbonization efforts given the relatively low carbon footprint of nuclear power to other existing energy sources. In addition, decisions by governments to build new power plants or decommission existing plants can positively and negatively impact our customer base.
- **Government budgets—**While we believe that we are poised for growth from governmental customers in both of our segments, our revenues and cash flows from government customers are influenced, particularly in the short-term, by budgetary cycles. This impact can be either positive or negative.
- **Nuclear new build projects—**A portion of our backlog is driven by contracts associated with the construction of new nuclear power plants. These contracts can be long-term in nature and provide us with a strong pipeline for the recognition of future revenues in our Industrial segment. We perform our services and provide our products at a fixed price for certain contracts. Fixed-price contracts carry inherent risks, including risks of losses from underestimating costs, operational difficulties and other changes that may occur over the contract period. If our cost estimates for a contract are inaccurate or if we do not execute the contract within our cost estimates, we may incur losses or the contract may not be as profitable as we expected. In addition, even though some of our longer-term contracts contain price escalation provisions, such provisions may not fully provide for cost increases, whether from inflation, the cost of goods and services to be delivered under such contracts or otherwise.
- **Research and development—**A portion of our operating expenses is associated with research and development activities associated with the design of new products. Given the specific design and application of certain of these products, there is some risk that these costs will not result in successful products in the market. Further, the timing of these products can move and be challenging to predict.
- **COVID-19—**COVID-19 may affect revenue growth in certain of our businesses, primarily those serving our medical end markets, and it is uncertain how materially COVID-19 will affect our global operations generally if these impacts were to persist or worsen over an extended period of time. The extent and duration of the impacts are uncertain and dependent in part on customers returning to work and economic activity ramping up. The impact

of COVID-19 on our customers has affected our sales operations in certain ways, including increased customer disputes regarding orders, delayed customer notices to proceed with production, delayed payment from customers and, on rare occasions, customers have refused to pay for their orders entirely. Further, access to customer sites for sales was limited in some cases.

### Non-GAAP Financial Measures

We report our financial results in accordance with generally accepted accounting principles in the United States. (“GAAP”). However, management believes certain non-GAAP financial measures provide investors and other users with additional meaningful information that should be considered when assessing our ongoing performance. Management also uses these non-GAAP financial measures in making financial, operating, and planning decisions, and in evaluating our performance. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our GAAP results. The non-GAAP financial measures we present may differ from similarly captioned measures presented by other companies. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business.

We use the non-GAAP financial measures “Adjusted revenues,” “Adjusted net (loss) income,” "Adjusted EPS," “EBITDA,” “EBITA,” “Adjusted EBITDA, “Free Cash Flow,” and “Adjusted Free Cash Flow.” See the “Quarterly Results of Operations” and “Cash flows” sections below for definitions of our non-GAAP financial measures and reconciliation to their most directly comparable GAAP measures.

See the "Basis of Presentation" section below regarding the Successor and Predecessor periods. The following tables present a reconciliation of certain non-GAAP financial measures for the three months ended March 31, 2022 (Successor) and for the three months ended March 31, 2021 (Predecessor).

*(In millions, except per share amounts)*

|  | Successor Three Months Ended March 31, 2022 Revenues | Net Income (Loss) | Predecessor Three Months Ended March 31, 2021 Revenues | Net Income (Loss) |
| --- | ---: | ---: | ---: | ---: |
| **Total GAAP** | **$163.2** | **$(19.0)** | **$166.2** | **$(40.7)** |
| Revenue reduction from purchase accounting | — | — | 4.3 | 4.3 |
| Cost of revenues impact from inventory valuation purchase accounting |  | 6.3 |  | 4.7 |
| Foreign currency (gain) loss, net |  | 1.5 |  | (4.0) |
| Amortization of acquired intangibles |  | 38.8 |  | 18.6 |
| Stock-based compensation expense |  | 7.8 |  | (0.1) |
| Change in fair value of warrant liabilities |  | (19.9) |  | — |
| Non-operating expenses |  | 9.4 |  | 16.1 |
| Tax impact of adjustments above |  | (7.4) |  | (9.0) |
| **Adjusted** | **$163.2** | **$17.5** | **$170.5** | **$(10.1)** |
| **Weighted average common shares outstanding — basic and diluted** |  | **180.774** |  | n.m.(1) |
| Dilutive Potential Common Shares - RSU's |  | — |  |  |
| **Adjusted weighted average common shares — diluted** |  | **180.774** |  | n.m |
| **Net loss per common share attributable to Mirion Technologies, Inc. (Successor)** |  | **$(0.10)** |  | n.m |
| Loss attributable to noncontrolling interests |  | (0.01) |  |  |
| Revenue reduction from purchase accounting |  | — |  |  |
| Cost of revenues impact from inventory valuation purchase accounting |  | 0.04 |  |  |
| Foreign currency (gain) loss, net |  | 0.01 |  |  |
| Amortization of acquired intangibles |  | 0.22 |  |  |
| Stock-based compensation expense |  | 0.04 |  |  |
| Change in fair value of warrant liabilities |  | (0.11) |  |  |
| Debt extinguishment |  | — |  |  |
| Non-operating expenses(1)(2)(3)(4)(5) |  | 0.05 |  |  |
| Tax impact of adjustments above |  | (0.04) |  |  |
| **Adjusted EPS** |  | **$0.10** |  | n.m |
| (1) Note that n.m. stands for not meaningful. |  |  |  |  |

36

*(In millions)*

|  | Successor Three Months Ended March 31, 2022 | Predecessor Three Months Ended March 31, 2021 |
| --- | ---: | ---: |
| **Net loss** | **$(19.0)** | **$(40.7)** |
| Interest expense, net | 7.9 | 43.1 |
| Income tax (benefit) provision | (4.1) | (7.1) |
| Amortization | 38.8 | 18.6 |
| **EBITA** | **$23.6** | **$13.9** |
| Depreciation - Mirion Business Combination step-up | 1.6 | — |
| Depreciation - all other | 4.6 | 5.0 |
| **EBITDA** | **$29.8** | **$18.9** |
| Stock-based compensation expense | 7.8 | (0.1) |
| Change in fair value of warrant liabilities | (19.9) | — |
| Foreign currency (gain) loss, net | 1.5 | (4.0) |
| Revenue reduction from purchase accounting | — | 4.3 |
| Cost of revenues impact from inventory valuation purchase accounting | 6.3 | 4.7 |
| Non-operating expenses(1)(2) | 9.4 | 16.1 |
| **Adjusted EBITDA** | **$34.9** | **$39.9** |

(1) Pre-tax non-operating expenses of $9.4 million for the three months ended March 31, 2022 include $3.6 million in costs to achieve integration and operational synergies, $2.8 million related to the Business Combination and incremental one-time costs associated with becoming public, $2.0 million of restructuring costs, and $1.0 million of costs to achieve information technology system integration and efficiency.

(2) Pre-tax non-operating expenses of $16.1 million for the three months ended March 31, 2021 include $5.6 million related to the Business Combination and incremental public company costs, $5.0 million in costs to achieve integration and operational synergies, $2.3 million of restructuring costs, $1.6 million of mergers and acquisition expenses, and $1.5 million of costs to achieve information technology system integration and efficiency.

The following tables present a reconciliation of non-GAAP Adjusted Revenue and Adjusted EBITDA by segment for the three months ended March 31, 2022 (Successor) and the three months ended March 31, 2021 (Predecessor):

*(In millions)*

|  | Three Months Ended March 31, 2022 (Successor) Medical | Industrial | Corporate & Other | Consolidated |
| --- | ---: | ---: | ---: | ---: |
| **Revenues** | **$60.1** | **$103.1** | **$—** | **$163.2** |
| Revenue reduction from purchase accounting | — | — | — | — |
| **Adjusted Revenues** | **$60.1** | **$103.1** | **$—** | **$163.2** |
| **Income from operations** | **$(3.5)** | **$(1.4)** | **$(28.7)** | **$(33.6)** |
| Amortization | 17.3 | 21.5 | — | 38.8 |
| Depreciation - core | 2.6 | 1.9 | 0.1 | 4.6 |
| Depreciation - Mirion Business Combination step-up | 1.2 | 0.4 | — | 1.6 |
| Cost of revenues impact from inventory valuation purchase accounting | 0.9 | 5.4 | — | 6.3 |
| Stock-based compensation | 0.1 | 0.1 | 7.6 | 7.8 |
| Non-operating expenses | — | — | 9.4 | 9.4 |
| **Adjusted EBITDA** | **$18.6** | **$27.9** | **$(11.6)** | **$34.9** |

*(In millions)*

|  | Three Months Ended March 31, 2021 (Predecessor) Medical | Industrial | Corporate & Other | Consolidated |
| --- | ---: | ---: | ---: | ---: |
| **Revenues** | **$51.5** | **$114.7** | **$—** | **$166.2** |
| Revenue reduction from purchase accounting | 4.3 | — | — | 4.3 |
| **Adjusted Revenues** | **$55.8** | **$114.7** | **$—** | **$170.5** |
| **Income from operations** | **$(2.3)** | **$17.8** | **$(24.4)** | **$(8.9)** |
| Amortization | 8.3 | 10.3 | — | 18.6 |
| Depreciation - core | 2.5 | 2.4 | 0.1 | 5.0 |
| Revenue reduction from purchase accounting | 4.3 | — | — | 4.3 |
| Cost of revenues impact from inventory valuation purchase accounting | 4.7 | — | — | 4.7 |
| Share-based compensation | — | — | (0.1) | (0.1) |
| Non-operating expenses | — | — | 16.1 | 16.1 |
| Other Income / Expense | — | — | 0.2 | 0.2 |
| **Adjusted EBITDA** | **$17.5** | **$30.5** | **$(8.1)** | **$39.9** |

### Our Business Segments

We manage and report our business in two business segments: Medical and Industrial.

**Medical** includes products and services for radiation therapy and personal dosimetry. This segment’s principal offerings are:

- ***Radiation Therapy Quality Assurance Solutions*** for calibrating and/or verifying imaging, treatment machine, patient treatment plan, and patient treatment accuracy (hardware and software);
- ***Dosimetry Solutions*** for monitoring the total amount of radiation medical staff members are exposed to over time; and
- ***Radionuclide Therapy Solutions***, which includes products for nuclear medicine in radiation measurement, shielding, product handling, medical imaging furniture and rehabilitation.

**Industrial** includes products and services for defense, nuclear energy, laboratories and research and other industrial markets. This segment’s principal offerings are:

- ***Reactor Safety and Control Systems***, which includes radiation monitoring systems and reactor instrumentation and control systems that ensure the safe operation of nuclear reactors and other nuclear fuel cycle facilities; and
- ***Radiological Search, Measurement and Analysis Systems***, which includes solutions to locate, measure and perform in-depth scientific analysis of radioactive sources for radiation safety, security, and scientific applications

### Recent Developments

#### Russia and Ukraine

The United States, the European Union, the United Kingdom and other governments have implemented major trade and financial sanctions against Russia and related parties in response to Russia's invasion of Ukraine. We do business with Russian customers both within and outside of Russia and with customers who have contracts with Russian counterparties. The conflict’s impact on the Company is predominantly in our Industrial segment where the Company has certain projects involving Russian customers or other Russian counterparties. For the 12 months ending December 31, 2022 and for subsequent years, we expect to derive approximately 5% of our revenue from Russian customers and projects involving Russian counterparties and technology. As of March 31, 2022, while we had not received any cancellation notices for these projects, we experienced delays in recognizing project revenue during the three months ended March 31, 2022 due to the trade and financial sanctions made to date. See further discussion in the "Results of Operations" section below. In addition, while none of these customers have asked for advanced payment refunds, they could seek to recover these payments depending on future developments.

On May 2, 2022, one of our customers announced that it had terminated a contract with a Russian state-owned entity to build a nuclear power plant in Finland. The contract represents a remaining performance obligation in our backlog of approximately $67 million, of which approximately 80% was scheduled to be recognized as revenue over the next five years. As of March 31, 2022, the contract's deferred contract revenue liability within our Industrial segment was $6.4 million.

The Company will continue to monitor the social, political, regulatory and economic environment in Ukraine and Russia, and will consider actions as appropriate.

#### Supply Chain

The global supply chain continued to be stressed by increased demand, along with pandemic-related and other global events that caused increased disruptions to the Company during the three months ended March 31, 2022. The most notable impacts to the Company were delays in sourcing key devices and components needed for our products, resulting in delays in revenue recognition, and increased costs in materials and freight. The Company mitigated a portion of these cost impacts with price increases on certain products. While we experienced some improvements in shipping delivery and associated labor availability during the three months ended March 31, 2022, the supply chain disruption continues to be a challenge and a risk of negatively impacting our future operating margins.

### Public Company Costs

As a public company listed on the NYSE, we expect to continue hiring additional staff and implementing new processes and procedures to address requirements in connection with being a public company. To date, we have incurred and expect to continue to incur substantial expenses for, among other things, directors’ and officers’ liability insurance, director fees, and additional internal and external costs for investor relations, accounting, audit, legal and other functions.

### Basis of Presentation

Financial information presented was derived from our historical consolidated financial statements and accounting records, and they reflect the historical financial position, results of operations and cash flows of the business in conformity with U.S. GAAP for financial statements and pursuant to the accounting and disclosure rules and regulations of the SEC. The consolidated financial statements include the accounts of the Company and its wholly owned and majority-owned or controlled subsidiaries. For consolidated subsidiaries where our ownership is less than 100%, the portion of the net income or loss allocable to noncontrolling interests is reported as “Income (Loss) attributable to noncontrolling interests” in the Condensed Consolidated Statements of Operations. All intercompany accounts and transactions have been eliminated in consolidation.

As a result of the Business Combination, the Company’s financial statement presentation distinguishes Mirion TopCo as the “Predecessor” through the Closing Date. The Company, which includes the combination of GSAH and Mirion subsequent to the Business Combination, is the “Successor” for periods after the Closing Date. As a result of the application of the acquisition method of accounting in the Successor Period, the financial statements for the Successor Period are presented on a full step-up basis as a result of the Business Combination, and are therefore not comparable to the financial statements of the Predecessor Periods that are not presented on the same full step-up basis due to the Business Combination.

### Certain Factors Affecting Comparability to Prior Period Financial Results

Prior to the Business Combination, GSAH operated as a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or assets. As a result, operations were minimal before the Business Combination and are not presented in the Predecessor Periods presented prior to the Business Combination. After the Business Combination our results of operations are not directly comparable to historical results of the operations for the periods presented, primarily because, in connection with the Business Combination, certain assets and liabilities had fair value adjustments applied to the Predecessor’s consolidated financial statements on the Closing Date, most notably:

- Inventory;
- Property, plant, and equipment;
- Goodwill;
- Intangible assets; and
- Taxes.

As a result, historical results of operations and other financial data, as well as period-to-period comparisons of these results, may not be comparable or indicative of future operating results or future financial condition.

### Results of Operations

### For the Successor Period Three Months Ended March 31, 2022 and the Predecessor Period Three Months Ended March 31, 2021

The following tables summarizes our results of operations for the periods presented below (in millions):

*Unaudited*

|  | Successor Three Months Ended March 31, 2022 | Predecessor Three Months Ended March 31, 2021 |
| --- | ---: | ---: |
| Revenues | $163.2 | $166.2 |
| Cost of revenues | 98.8 | 103.7 |
| Gross profit | 64.4 | 62.5 |
| Selling, general and administrative expenses | 90.9 | 60.4 |
| Research and development | 7.1 | 11.0 |
| Loss from operations | (33.6) | (8.9) |
| Interest expense, net | 7.9 | 43.1 |
| Foreign currency loss (gain), net | 1.5 | (4.0) |
| Change in fair value of warrant liabilities - (gain)/loss | (19.9) | — |
| Other expense (income), net | — | (0.2) |
| Loss before benefit from income taxes | (23.1) | (47.8) |
| Benefit from income taxes | (4.1) | (7.1) |
| Net loss | (19.0) | (40.7) |
| Loss attributable to noncontrolling interests | (1.3) | — |
| Net loss attributable to stockholders | $(17.7) | $(40.7) |

#### Overview

Revenues were $163.2 million for the three months ended March 31, 2022 and $166.2 million for the three months ended March 31, 2021. The decrease of $3.0 million from the three months ended March 31, 2021 was primarily driven by timing of project execution, delays caused by the Russia and Ukraine conflict, and supply chain-caused delays, offset by 2021 acquisitions and organic growth in the Medical segment. Cost of revenues was $98.8 million for the three months ended March 31, 2022 and $103.7 million for the three months ended March 31, 2021, which decreased 4.7%, reflecting the decrease in revenues. Gross profit increased by $1.9 million from the three months ended March 31, 2021. There was a net loss attributable to stockholders of $17.7 million for the three months ended March 31, 2022 and $40.7 million for the three months ended March 31, 2021. There was a $23.0 million decrease in net loss attributable to stockholders as a result of the lower Cost of revenues of $4.9 million, decreased net third party interest expense of $3.0 million, decreased related party interest expense of $32.2 million, and a gain recognized on the change in fair value of warrant liabilities of $19.9 million. Offsetting these impacts were the negative impact of foreign currency exchange of $5.5 million, a net decrease in income tax benefit of $3.0 million, higher selling, general and administrative expenses of $30.5 million, primarily driven by the impact of acquisitions in the Medical segment, and increased compensation, facility costs, and professional fees with higher headcounts, and stock-based compensation expense. The impact of purchase accounting related to the fair value adjustment of deferred revenue for the SNC acquisition reduced revenue for the three months ended March 31, 2021 by $4.3 million. The impact of purchase accounting related to the fair value of inventory increased cost of revenues by $6.1 million for the three months ended March 31, 2022 and $4.7 million for the three months ended March 31, 2021, resulting in net increased cost of revenues by $1.4 million. The impact of purchase accounting related to the fair values of intangible assets and property, plant, and equipment for the Business Combination resulted in increased amortization and depreciation expense and increased net loss by $19.0 million and $1.6 million, respectively.

#### Revenues

Revenues were $163.2 million for the three months ended March 31, 2022 and $166.2 million for the three months ended March 31, 2021. Revenues decreased $3.0 million from the three months ended March 31, 2021. The net decrease was caused primarily by the Russia-Ukraine conflict, project execution timing and supply chain-caused delays.

Medical segment revenues increased $8.6 million, primarily driven by results of acquisitions in the Medical segment contributing $4.3 million (of which $3.7 million was generated by CIRS and $0.6 million by other acquisitions) for the three months ended March 31, 2022 and increased revenues of $3.5 million due to price increases and organic growth. Also driving the increase was the impact of the deferred revenue fair value adjustment for the SNC acquisition, which reduced revenues by $4.3 million for the three months ended March 31, 2021. Offsetting the increase in Medical segment revenues period over period were the impact of supply chain issues of $3.0 million, which affected our shipments in the three months ended March 31, 2022, and a negative foreign exchange currency impact of approximately $0.5 million.

Industrial segment revenues decreased $11.6 million, primarily driven by delays caused by the Russia-Ukraine conflict with impact of $2.1 million, contract execution timing and supply chain issues with an impact of $6.2 million, and foreign exchange rate fluctuations of $4.4 million, offset by a $1.1 million increase in other revenues.

By segment, revenues for the three months ended March 31, 2022 and 2021 were $60.1 million and $51.5 million in the Medical segment, respectively, and $103.1 million and $114.7 million in the Industrial segment, respectively. Movements in revenues by segment are detailed in the “Business Segments” section below.

#### Cost of revenues

Cost of revenues was $98.8 million for the three months ended March 31, 2022 and $103.7 million for the three months ended March 31, 2021. Cost of revenues as a percentage of revenues was 60.5% for the three months ended March 31, 2022, 62.4% for the three months ended March 31, 2021. The decrease in the three months ended March 31, 2022 was driven by a decrease in manufacturing supplies, materials, and overhead costs due to delays in contracts and an overall revenue decrease in the Industrial segment. Offsetting the decrease in cost of revenues period over period was the cost of revenues related to acquisitions in our Medical segment. Cost of revenues related to acquisitions made in 2021 (CIRS) resulted in $1.5 million of incremental cost of revenues for the three months ended March 31, 2022. In addition, cost of revenues for the three months ended March 31, 2022 includes $6.1 million due to purchase accounting related to the fair value of inventory from the Business Combination, $0.2 million of increased amortization expense resulting from increased intangible assets from the Business Combination, and $1.4 million of increased depreciation expense resulting from increased fair values of property, plant, and equipment from the Business Combination. Cost of revenues for the three months ended March 31, 2021 includes $4.7 million due to purchase accounting related to the fair value of inventory from previous acquisitions.

#### Selling, general and administrative expenses

Selling, general and administrative (“SG&A”) expenses were $90.9 million for the three months ended March 31, 2022 and $60.4 million for the three months ended March 31, 2021, resulting in an increase of $30.5 million. The primary drivers behind the increase in SG&A expenses were the $2.3 million impact of the CIRS acquisition in the Medical segment, a $3.9 million increase in compensation, facility costs, and professional services associated with an increase in number of employees (partially due to a reorganization of research and development departments) and incremental public company costs, as well as a $7.8 million increase in stock-based compensation expense related to the Profits Interests ($6.8 million) and stock awards issued under the 2021 Omnibus Incentive Plan ($1.0 million) (see Note 13, *Stock-based compensation*, to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q). In addition, SG&A for the three months ended March 31, 2022 includes $19.2 million of increased amortization expense resulting from increased intangible assets from the Business Combination. Offsetting the increase in SG&A period over period were a $2.8 million decrease in legal and professional fees related to the Business Combination and incremental public company costs, and a $1.6 million decrease in mergers and acquisitions expenses.

#### Research and development

Research and development (“R&D”) expenses were $7.1 million for the three months ended March 31, 2022 and $11.0 million for the three months ended March 31, 2021, resulting in a decrease of $3.9 million. The decrease in R&D expense was primarily a result of a reduction in R&D program spend ($1.7 million) at Corporate and in the Industrial segment and a reorganization of personnel to non-R&D departments ($1.7 million) in the Medical segment for the three months ended March 31, 2021.

#### Income (loss) from operations

Loss from operations was $33.6 million for the three months ended March 31, 2022 and $8.9 million for the three months ended March 31, 2021, which resulted in an increased loss of $24.7 million. On a segment basis, loss from operations in the Medical segment for the three months ended March 31, 2022 and 2021 was $3.5 million and $2.3 million, respectively, which includes $5.2 million and $4.3 million, respectively, in purchase accounting impacts described in revenues, cost of revenues, and SG&A above. (Loss) income from operations in the Industrial segment for the three months ended March 31, 2022 and three months ended March 31, 2021 was $(1.4) million and $17.8 million, respectively, which includes $17.0 million in purchase accounting impacts described in cost of revenues and SG&A above for the three months ended March 31, 2022. Corporate expenses were $28.7 million and $24.4 million for the three months ended March 31, 2022 and 2021, respectively. See “Business segments” and “Corporate and other” below for further details.

#### Interest expense, net

Interest expense, net, was $7.9 million for the three months ended March 31, 2022 and $43.1 million for the three months ended March 31, 2021. $32.2 million of the decrease is a non-cash decrease in interest related to the Shareholder Notes which were paid in full in connection with the closing of the Business Combination. $3.0 million is a decrease in interest due to lower interest rates associated with 2021 Credit Agreement compared to 2019 Credit Facility which was paid in full in connection with the closing of the Business Combination. For more information, see Note 8, *Borrowing*s, to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

#### Foreign currency loss (gain), net

We recorded a loss of $1.5 million for the three months ended March 31, 2022 and a gain of $4.0 million for the three months ended March 31, 2021 from foreign currency exchange. The change in net foreign currency losses is due to appreciation in European and Canadian local currencies in relation to the U.S. dollar and primarily related to our Euro debt in the prior year comparable period.

#### Change in fair value of warrant liabilities

We recognized an unrealized gain of $19.9 million resulting from a decrease in the fair value of the Public Warrant and Private Placement Warrant liabilities during the three months ended March 31, 2022. See Note 16, *Fair Value Measurements*, to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

#### Income taxes

Income tax benefit was $4.1 million for the three months ended March 31, 2022 and $7.1 million for the three months ended March 31, 2021. Income tax benefit in the three months ended March 31, 2022 differed from income tax benefit in the three months ended March 31, 2021, primarily due to the mix of earnings, certain adjustments for the Successor Period as a result of the Business Combination, and valuation allowances in the Predecessor Period.

#### Business segments

The following provides detail for business segment results for the three months ended March 31, 2022 and 2021. Segment (loss) income from operations includes revenues of the segment less expenses that are directly related to those revenues but excludes certain charges to cost of revenues and SG&A expenses predominantly related to corporate costs, shared overhead and other costs related to restructuring activities and costs to achieve operational initiatives, which are included in Corporate and Other in the table below. Interest expense, loss on debt extinguishment, foreign currency loss (gain), net, and other expense (income), net, are not allocated to segments.

For reconciliations of segment revenues and operating (loss) income to our consolidated results, see Note 15, *Segment Information*, to the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

#### Medical

*Unaudited*

*(In millions)*

|  | Successor Three Months Ended March 31, 2022 | Predecessor Three Months Ended March 31, 2021 |
| --- | ---: | ---: |
| Revenues | $60.1 | $51.5 |
| Loss from operations | $(3.5) | $(2.3) |
| Loss from operations as a % of revenues | (5.8)% | (4.5)% |

Medical segment revenues were $60.1 million for the three months ended March 31, 2022 and $51.5 million for the three months ended March 31, 2021, which is an increase of $8.6 million. Revenues increased primarily due to the impact of acquisitions contributing $4.3 million (of which $3.7 million by CIRS and $0.6 million by other acquisitions), the impact of prior year purchase accounting adjustment related to the SNC acquisition which resulted in a revenue reduction of $4.3 million, and an increased revenue of $3.5 million due to price increases and organic growth. Offsetting the increase in Medical segment revenues period over period were a reduction in revenues due to the supply chain issue by $3.0 million and a negative foreign currency exchange impact by approximately $0.5 million.

Loss from operations, which excludes non-operational costs, was $3.5 million and $2.3 million for the three months ended March 31, 2022 and 2021, respectively, representing an increase in loss from operations of $1.2 million. The increase in loss from operations period over period was largely due to increasing operating expenses ($5.2 million) and a reduction in revenues due to the supply chain issue ($3.0 million), which was offset by an increase in revenues from our organic growth ($2.6 million). Furthermore, a $4.3 million reduction in revenue in the three months ended March 31, 2021 due to purchase accounting related to the SNC acquisition no longer impacted the current period.

#### Industrial

*Unaudited*

*(In millions)*

|  | Successor Three Months Ended March 31, 2022 | Predecessor Three Months Ended March 31, 2021 |
| --- | ---: | ---: |
| Revenues | $103.1 | $114.7 |
| (Loss) Income from operations | (1.4) | 17.8 |
| (Loss) Income from operations as a % of revenues | (1.4)% | 15.5% |

Industrial segment revenues were $103.1 million for three months ended March 31, 2022 and $114.7 million for the three months ended March 31, 2021, representing a decrease of $11.6 million. The decrease is primarily driven by delays caused by the Russia-Ukraine conflict with impact of $2.1 million, project execution timing and supply chain issues with impact of $6.2 million, and foreign exchange rate fluctuations of $4.4 million, offset by a $1.1 million increase in other revenues.

Loss from operations, which excludes non-operational costs, was $1.4 million for the three months ended March 31, 2022 and Income from operations was $17.8 million for the three months ended March 31, 2021. Loss from operations, which excludes non-operational costs, decreased $19.2 million period over period driven primarily by higher cost of revenues including $5.4 million of inventory step-up and higher amortization of $11.2 million, both related to the Business Combination purchase accounting.

#### Corporate and other

Corporate and other costs include costs associated with our corporate headquarters located in Georgia, as well as centralized global functions including Executive, Finance, Legal and Compliance, Human Resources, Technology, Strategy, and Marketing and other costs related to company-wide initiatives (e.g., Business Combination transaction expenses, merger and acquisition activities, restructuring and other initiatives).

Corporate and other costs were $28.7 million for the three months ended March 31, 2022 and $24.4 million for the three months ended March 31, 2021, which represents an increase of $4.3 million. The increase versus the comparable period was predominantly driven by an increase in stock-based compensation expense of $7.6 million (see Note 13, *Stock-based compensation*) and an increase of $0.9 million in compensation expense, $1.3 million increase in facility costs and $1.5 million increase in professional services mostly due to becoming a public company, offset by $6.7 million decrease in other costs related to company-wide initiatives ($2.8 million in legal and professional fees related to Business Combination, $1.9 million in operations and information technology integrations, $0.3 million in restructuring costs, and $1.6 million in merger and acquisition costs). For reconciliations of segment operating income and corporate and other costs to our consolidated results, see Note 15, *Segment Information*, to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

### Quarterly Results of Operations

The following table sets forth selected unaudited quarterly financial data for the current Successor quarter, our last seven completed fiscal quarters (Predecessor) and for the transition periods from July 1, 2021 through October 19, 2021 (Predecessor Stub Period) and from October 20, 2021 through December 31, 2021 (Successor). The information for each of these periods reflects all adjustments that are of a normal, recurring nature and that we consider necessary for a fair presentation of our operating results for such periods. The results of operations presented should be read in conjunction with our audited consolidated financial statements and notes thereto appearing elsewhere in this document and are not necessarily indicative of our operating results for any future period. Revenues for certain quarters/periods are impacted by the capital spending patterns of government customers, which are influenced by budgetary considerations and driven by timing of fiscal year-ends.

*(In millions)*

|  | Successor March 31, 2022 | From October 20, 2021 through December 31, 2021 | Predecessor From July 1, 2021 through October 19, 2021 | September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenues | $163.2 | $154.1 | $168.0 | $144.3 | $180.0 | $166.2 | $150.8 | $114.6 | $141.2 |
| Adjusted revenues(1)(2) | $163.2 | $156.4 | $172.5 | $148.0 | $183.7 | $170.5 | $150.8 | $114.6 | $141.4 |
| Net loss | $(19.0) | $(23.0) | $(105.7) | $(46.7) | $(53.9) | $(40.7) | $(23.4) | $(40.4) | $(24.5) |
| Adjusted net income (loss)(1)(3) | $17.5 | $25.6 | $(33.9) | $(20.1) | $(23.3) | $(10.1) | $(0.4) | $(20.9) | $(5.4) |
| Net loss per common share attributable to Mirion Technologies, Inc. (Successor) | $(0.10) | $(0.12) | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Adjusted EPS(1)(4) | $0.10 | $0.14 | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| EBITA(1)(5) | $23.6 | $8.4 | $(38.8) | $8.5 | $22.7 | $13.8 | $16.4 | $8.8 | $25.9 |
| EBITDA(1)(5) | $29.8 | $13.7 | $(32.6) | $13.6 | $29.7 | $18.8 | $21.0 | $13.1 | $30.4 |
| Adjusted EBITDA(1)(5) | $34.9 | $44.5 | $31.2 | $30.9 | $50.0 | $39.8 | $38.3 | $24.1 | $40.9 |

(1) Adjusted revenues, Adjusted net (loss) income, Adjusted EPS, EBITA, EBITDA and Adjusted EBITDA are supplemental measures of our performance that are not required by, or presented in accordance with, U.S. GAAP. Adjusted revenues, Adjusted net (loss) income, Adjusted EPS, EBITA, EBITDA, and Adjusted EBITDA are included in this document because they are key metrics used by management to assess our financial performance. We believe that these measures are useful because they provide investors with information regarding our operating performance that is used by our management in its reporting and planning processes. These measures may not be comparable to similarly titled measures and disclosures reported by other companies.

Adjusted revenues are defined as U.S. GAAP revenues adjusted to remove the impact of purchase accounting on the recognition of deferred revenue. We have acquired businesses whose net tangible assets include deferred revenue. In accordance with GAAP reporting requirements, we recorded adjustments reducing deferred revenue under arrangements predating the business combination to fair value for all business combinations occurring prior. Therefore, our GAAP revenues after the date of acquisition will not reflect the full amount of revenues that would have been reported if the acquired deferred revenue was not written down to fair value. Therefore, Adjusted revenues reverses the impact of this deferred revenue write-down to provide another view of the revenue run-rate in a given period and providing meaningful information for comparative results in future periods.

Adjusted net (loss) income is defined as U.S. GAAP net income adjusted for foreign currency gains and losses, amortization of acquired intangible assets, the impact of purchase accounting on the recognition of deferred revenue, changes in the fair value of warrants, certain non-operating expenses (certain purchase accounting impacts related to revenues and inventory, restructuring and costs to achieve operational synergies, merger and acquisition expenses and IT project implementation expenses), and income tax impacts of these adjustments. Adjusted EPS is defined as adjusted net (loss) income divided by weighted average common shares outstanding — basic and diluted.

EBITA is defined as income before net interest expenses (including loss on debt extinguishment), income tax (benefit) provision, and amortization. EBITDA is defined as income before net interest expense (including loss on debt extinguishment), income tax (benefit) provision, and depreciation and amortization. EBITA and EBITDA are not terms defined under U.S. GAAP and do not purport to be alternatives to net income as measures of operating performance or to cash flows from operating activities as measures of liquidity. Additionally, EBITA and EBITDA are not intended to be measures of free cash flow available for management’s discretionary use as they do not consider certain cash requirements such as interest payments, tax payments and debt service requirements.

Adjusted EBITDA is defined as EBITDA excluding the items described in the table below. Adjusted EBITDA is used by management as a measure of operating performance. We believe that the inclusion of supplementary adjustments to EBITDA applied in presenting Adjusted EBITDA is appropriate to provide additional information to investors about our results of operations that management utilizes on an ongoing basis to assess our core operating performance.

EBITA, EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures used by other companies. You should not consider our EBITA, EBITDA and Adjusted EBITDA as alternatives to operating income or net income, determined in accordance with U.S. GAAP.

(2) The following table reconciles Adjusted revenues to the most directly comparable U.S. GAAP financial performance measure, which is revenues:

*(In millions)*

|  | Successor March 31, 2022 | From October 20, 2021 through December 31, 2021 | Predecessor From July 1, 2021 through October 19, 2021 | September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| **Revenues** | **$163.2** | **$154.1** | **$168.0** | **$144.3** | **$180.0** | **$166.2** | **$150.8** | **$114.6** | **$141.2** |
| Revenue reduction from purchase accounting | — | 2.3 | 4.5 | 3.7 | 3.7 | 4.3 | — | — | 0.2 |
| **Adjusted revenues** | **$163.2** | **$156.4** | **$172.5** | **$148.0** | **$183.7** | **$170.5** | **$150.8** | **$114.6** | **$141.4** |

45

(3) The following table reconciles Adjusted net income (loss) to the most directly comparable U.S. GAAP financial performance measure, which is net loss:

*(In millions)*

|  | Successor Three Months Ended March 31, 2022 | From October 20, 2021 through December 31, 2021 | Predecessor From July 1, 2021 through October 19, 2021 | September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| **Net loss** | **$(19.0)** | **$(23.0)** | **$(105.7)** | **$(46.7)** | **$(53.9)** | **$(40.7)** | **$(23.4)** | **$(40.4)** | **$(24.5)** |
| Revenue reduction from purchase accounting | — | 2.3 | 4.5 | 3.7 | 3.7 | 4.3 | — | — | 0.2 |
| Cost of revenues impact from inventory valuation purchase accounting | 6.3 | 15.8 | — | — | — | 4.7 | 0.5 | — | 0.5 |
| Foreign currency loss (gain), net | 1.5 | 1.6 | (0.6) | (1.4) | 1.1 | (4.0) | 8.2 | 8.1 | 3.4 |
| Amortization of acquired intangibles | 38.8 | 32.0 | 19.7 | 16.1 | 18.6 | 18.6 | 13.5 | 12.2 | 12.4 |
| Stock/share-based compensation | 7.8 | 5.3 | 9.3 | — | — | (0.1) | 0.1 | — | — |
| Change in fair value of warrant liabilities | (19.9) | (1.2) | — | — | — | — | — | — | — |
| Debt extinguishment | — | — | 15.9 | — | — | — | — | — | — |
| Non-operating expenses | 9.4 | 7.0 | 34.7 | 15.0 | 15.6 | 16.1 | 8.5 | 2.9 | 6.4 |
| Tax impact of adjustments above | (7.4) | (14.2) | (11.7) | (6.8) | (8.4) | (9.0) | (7.8) | (3.7) | (3.8) |
| **Adjusted net income (loss)** | **$17.5** | **$25.6** | **$(33.9)** | **$(20.1)** | **$(23.3)** | **$(10.1)** | **$(0.4)** | **$(20.9)** | **$(5.4)** |
| Weighted average common shares outstanding — basic and diluted | 180.774 | 180.773 | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Adjusted EPS | $0.10 | $0.14 | N/A | N/A | N/A | N/A | N/A | N/A | N/A |

46

(4) The following table reconciles Adjusted EPS to the most directly comparable U.S. GAAP financial performance measure, which is Net loss per common share attributable to Mirion Technologies, Inc. (Successor):

*(Amounts per share, except for outstanding shares in millions)*

|  | Successor\* Three Months Ended March 31, 2022 | From October 20, 2021 through December 31, 2021 |
| --- | ---: | ---: |
| **Net loss per common share attributable to Mirion Technologies, Inc. (Successor)** | **$(0.10)** | **$(0.12)** |
| Loss attributable to noncontrolling interests | (0.01) | (0.01) |
| Revenue reduction from purchase accounting | — | 0.01 |
| Cost of revenues impact from inventory valuation purchase accounting | 0.04 | 0.09 |
| Foreign currency loss (gain), net | 0.01 | 0.01 |
| Amortization of acquired intangibles | 0.22 | 0.18 |
| Stock-based compensation | 0.04 | 0.03 |
| Change in fair value of warrant liabilities | (0.11) | (0.01) |
| Non-operating expenses | 0.05 | 0.04 |
| Tax impact of adjustments above | (0.04) | (0.08) |
| **Adjusted EPS** | **$0.10** | **$0.14** |
| **Weighted average common shares outstanding — basic and diluted** | **180.774** | **180.773** |
| Dilutive Potential Common Shares - RSU's | 0.000 | 0.003 |
| **Adjusted weighted average common shares — diluted** | **180.774** | **180.776** |

\* Note that Predecessor quarters have not been presented as Adjusted EPS is not meaningful for periods prior to the Business Combination due to the change in the capital structure.

(5) The following table reconciles EBITA, EBITDA and Adjusted EBITDA to the most directly comparable U.S. GAAP financial performance measure, which is net loss:

*(In millions)*

|  | Successor March 31, 2022 | From October 20, 2021 through December 31, 2021 | Predecessor From July 1, 2021 through October 19, 2021 | September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| **Net loss** | **$(19.0)** | **$(23.0)** | **$(105.7)** | **$(46.7)** | **$(53.9)** | **$(40.7)** | **$(23.4)** | **$(40.4)** | **$(24.5)** |
| Interest expense, net | 7.9 | 6.2 | 52.8 | 43.8 | 43.7 | 43.0 | 38.5 | 38.0 | 38.7 |
| Income tax (benefit) provision | (4.1) | (6.8) | (5.6) | (4.7) | 14.4 | (7.1) | (12.2) | (1.0) | (0.7) |
| Amortization | 38.8 | 32.0 | 19.7 | 16.1 | 18.5 | 18.6 | 13.5 | 12.2 | 12.4 |
| **EBITA** | **23.6** | **8.4** | **(38.8)** | **8.5** | **22.7** | **13.8** | **16.4** | **8.8** | **25.9** |
| Depreciation | 6.2 | 5.3 | 6.2 | 5.1 | 6.9 | 5.0 | 4.6 | 4.3 | 4.5 |
| **EBITDA** | **29.8** | **13.7** | **(32.6)** | **13.6** | **29.6** | **18.8** | **21.0** | **13.1** | **30.4** |
| Stock compensation expense | 7.8 | 5.3 | 9.3 | — | — | (0.1) | 0.1 | — | — |
| Change in fair value of warrant liabilities | (19.9) | (1.2) | — | — |  |  |  |  |  |
| Debt extinguishment | — | — | 15.9 | — | — | — | — | — | — |
| Foreign currency loss (gain), net | 1.5 | 1.6 | (0.6) | (1.4) | 1.1 | (4.0) | 8.2 | 8.1 | 3.4 |
| Revenue reduction from purchase accounting | — | 2.3 | 4.5 | 3.7 | 3.7 | 4.3 | — | — | 0.2 |
| Cost of revenues impact from inventory valuation purchase accounting | 6.3 | 15.8 | — | — | — | 4.7 | 0.5 | — | 0.5 |
| Non-operating expenses | 9.4 | 7.0 | 34.7 | 15.0 | 15.6 | 16.1 | 8.5 | 2.9 | 6.4 |
| **Adjusted EBITDA** | **$34.9** | **$44.5** | **$31.2** | **$30.9** | **$50.0** | **$39.8** | **$38.3** | **$24.1** | **$40.9** |

### Liquidity and Capital Resources

#### Overview of Liquidity

Our primary future cash needs relate to working capital, operating activities, capital spending, strategic investments, and debt service.

Mirion management believes that net cash provided by operating activities, augmented by long-term debt arrangements, will provide adequate liquidity for the next 12 months of independent operations, as well as the resources necessary to invest for growth in existing businesses and manage its capital structure on a short- and long-term basis. Access to capital and availability of financing on acceptable terms in the future will be affected by many factors, including our credit rating, economic conditions, and the overall liquidity of capital markets. There can be no assurance of continued access to capital markets on acceptable terms.

At March 31, 2022 and December 31, 2021 we had $84.2 million and $84.0 million, respectively, in cash and cash equivalents, which include amounts held by entities outside of the United States of approximately $68.0 million and $69.5 million, respectively, primarily in Europe and Canada. Non-U.S. cash is generally available for repatriation without legal restrictions, subject to certain taxes, mainly withholding taxes. We are asserting indefinite reinvestment of cash for non-U.S. subsidiaries. The Company has alternative repatriation options other than dividends should the need arise. The 2021 Credit Agreement provides for up to $90.0 million of revolving borrowings.

There is a discussion in Note 8, *Borrowings*, of the condensed consolidated financial statements included elsewhere in this Form 10-Q of the long-term debt arrangements issued by Mirion. For more information on our lease commitments, See

Note 9, *Leased Assets*, of the condensed consolidated financial statements and for other commitments and contingencies, see Note 10, *Commitments and Contingencies* of the condensed consolidated financial statements.

### Debt Profile

#### 2021 Credit Agreement

On the Closing Date, certain subsidiaries of the Company entered into a credit agreement (the “2021 Credit Agreement”) among Mirion Technologies (HoldingSub2), Ltd., a limited liability company incorporated in England and Wales, as Holdings, Mirion Technologies (US Holdings), Inc., as the Parent Borrower, Mirion Technologies (US), Inc., as the Subsidiary Borrower, the lending institutions party thereto, Citibank, N.A., as the Administrative Agent and Collateral Agent and Goldman Sachs Lending Partners, Citigroup Global Markets Inc., Jefferies Finance LLC and JPMorgan Chase Bank, N.A., as the Joint Lead Arrangers and Bookrunners. The 2021 Credit Agreement refinanced and replaced an earlier credit facility (the "2019 Credit Facility").

The 2021 Credit Agreement provides for an $830.0 million senior secured first lien term loan facility and a $90.0 million senior secured revolving facility (collectively, the “Credit Facilities”). Funds from the Credit Facilities are permitted to be used in connection with the Business Combination and related transactions, to refinance the 2019 Credit Facility referred to above and for general corporate purposes. The term loan facility is scheduled to mature on October 20, 2028 and the revolving facility is scheduled to expire and mature on October 20, 2026. The agreement requires the payment of a commitment fee of 0.50% per annum for unused revolving commitments, subject to stepdowns to 0.375% per annum and 0.25% per annum upon the achievement of specified leverage ratios. Any outstanding letters of credit issued under the 2021 Credit Agreement reduce the availability under the revolving line of credit.

The 2021 Credit Agreement is secured by a first priority lien on the equity interests of the Parent Borrower owned by Holdings and substantially all of the assets (subject to customary exceptions) of the borrowers and the other guarantors thereunder. Interest with respect to the facilities is based on, at the option of the borrowers, (i) a customary base rate formula for borrowings in U.S. dollars or (ii) a floating rate formula based on LIBOR (with customary fallback provisions described below) for borrowings in U.S. dollars, a floating rate formula based on EURIBOR for borrowings in Euro or a floating rate formula based on SONIA for borrowings in Pounds Sterling, each as described in the 2021 Credit Agreement with respect to the applicable type of borrowing. The 2021 Credit Agreement includes fallback language that seeks to either facilitate an agreement with our lenders on a replacement rate for LIBOR in the event of its discontinuance or that automatically replaces LIBOR with benchmark rates based on the Secured Overnight Financing Rate ("SOFR") or other benchmark replacement rates upon triggering events.

The 2021 Credit Agreement contains customary representations and warranties as well as customary affirmative and negative covenants and events of default. The negative covenants include, among others and in each case subject to certain thresholds and exceptions, limitations on incurrence of liens, limitations on incurrence of indebtedness, limitations on making dividends and other distributions, limitations on engaging in asset sales, limitations on making investments, and a financial covenant that the “First Lien Net Leverage Ratio” (as defined in the 2021 Credit Agreement) as of the end of any fiscal quarter is not greater than 7.00 to 1.00 if on the last day of such fiscal quarter certain borrowings outstanding under the revolving credit facility exceed 40% of the total revolving credit commitments at such time. The covenants also contain limitations on the activities of Mirion Technologies (HoldingSub2), Ltd. as the “passive” holding company. If any of the events of default occur and are not cured or waived, any unpaid amounts under the 2021 Credit Agreement may be declared immediately due and payable, the revolving credit commitments may be terminated and remedies against the collateral may be exercised.

### Cash flows

Three Months ended March 31, 2022 (Successor) compared to three Months Ended March 31, 2021 (Predecessor)

*Unaudited*

*(In millions)*

|  | Successor Three Months Ended March 31, 2022 | Predecessor Three Months Ended March 31, 2021 |
| --- | ---: | ---: |
| Net cash provided by operating activities | $11.4 | $10.9 |
| Net cash used in investing activities | $(7.9) | $(23.0) |
| Net cash provided by financing activities | $(0.6) | $(7.3) |

49

### Non-GAAP:

*Unaudited*

*(In millions)*

|  | Successor Three Months Ended March 31, 2022 | Predecessor Three Months Ended March 31, 2021 |
| --- | ---: | ---: |
| **Net cash provided by operating activities** | **$11.4** | **$10.9** |
| Purchases of property, plant, and equipment and badges | (8.7) | (8.0) |
| **Free cash flow(1)** | **$2.7** | **$2.9** |
| Cash used for non-operating expenses | 7.3 | 6.9 |
| **Adjusted free cash flow(1)** | **$10.0** | **$9.8** |

(1) Free cash flow and Adjusted free cash flow are supplemental measures of our performance that are not required by, or presented in accordance with, U.S. GAAP. We believe that Free cash flow and Adjusted free cash flow are important because they provide management with measurements of cash generated from operations that is available for payment obligations and investment opportunities, such as repaying debt and funding acquisitions.

Free cash flow is defined as U.S. GAAP net cash provided by operating activities adjusted to include the impact of purchases of property, plant, and equipment and purchases of badges. Adjusted free cash flow is defined as Free cash flow adjusted to include the impact of cash used to fund non-operating expenses (as previously defined). We believe that the inclusion of supplementary adjustments to Free cash flow applied in presenting Adjusted free cash flow is appropriate to provide additional information to investors about our cash flows that management utilizes on an ongoing basis to assess our ability to generate cash for use in acquisitions and other investing and financing activities.

Free cash flow and Adjusted free cash flow may not be comparable to similarly titled measures used by other companies. You should not consider our Free cash flow or Adjusted free cash flow as alternatives to net cash provided by (used for) operating activities in accordance with U.S. GAAP.

#### Net Cash Provided by Operating Activities

Net cash provided by operating activities was $11.4 million for the three months ended March 31, 2022 (Successor) and $10.9 million for the three months ended March 31, 2021 (Predecessor), representing an increase of $0.5 million.

The increase is partially due to a decrease in net loss of $21.7 million. Non-cash add-backs to net income included an increase of depreciation and amortization by $21.3 million and an increase in share-based compensation expense by $8.0 million, partially offset by a decline in the fair value of warrant liabilities by $19.9 million and a decline in deferred income taxes by $9.7 million. Cash from working capital decreased by $8.2 million period over period. Within working capital, accounts payable decreased by $22.5 million and other liabilities decreased by $6.3 million, partially offset by accounts receivable increased by $23.1 million as a result of higher billings.

#### Net Cash Used in Investing Activities

Net cash used in investing activities was $7.9 million for the three months ended March 31, 2022 (Successor) and $23.0 million for the three months ended March 31, 2021 (Predecessor). The difference is driven primarily by the payment of deferred consideration of $15.0 million related to the SNC acquisition during the three months ended March 31, 2021. Additionally, $0.7 million relates to an increase of purchases of property, plant, and equipment and badges offset by cash provided from the sale of property, plant and equipment of $0.8 million in the three months ended March 31, 2021.

#### Net Cash Provided by Financing Activities

Net cash provided by financing activities was $0.6 million during the three months ended March 31, 2022 (Successor) and $7.3 million during the three months ended March 31, 2021 (Predecessor). The Predecessor financing activities primarily related to $(7.5) million of principal repayments during the three months ended March 31, 2021.

### Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. Such estimates are based on historical experience and on various other factors that management believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these judgments and estimates under different assumptions or conditions and any such differences may be material.

During the three months ended March 31, 2022, there were no material changes to our critical accounting policies and estimates from those described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K.

### Recent Accounting Pronouncements

See Note 1 to our unaudited condensed financial statements included elsewhere in this Quarterly Report on Form 10-Q for more information.

## Market risk

As filed, 222 characters.

### Quantitative and Qualitative Disclosures about Market Risk

We have no material changes to the disclosures on this matter made in our Annual Report on Form 10-K for the periods ended March 31, 2022 and December 31, 2021.

## Controls and procedures

As filed, 1,940 characters.

### Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that material information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive

Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

As required by Rules 13a-15(e) and 15d-15(e) under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2022. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2022, our disclosure controls and procedures (as defined in Rules 13a- 15(e) and 15d-15(e) under the Exchange Act) were effective.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgement in evaluating the cost-benefit relationship of possible controls and procedures.

### Changes in Internal Control Over Financial Reporting

There were no changes to our internal control over financial reporting (as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the quarter ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 2,787 characters.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2021, as further updated and supplemented below, which could materially affect our business, results of operations, and financial condition. These risks are not the only risks facing our Company. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, could also materially adversely affect our business, financial condition or future results.

***The military conflict between Russia and Ukraine and the sanctions imposed as a result have adversely affected and may further adversely affect our business, results of operations, and financial condition.***

We do business with Russian customers both within and outside of Russia and with customers who have contracts with Russian counterparties. Uncertain geopolitical conditions, the invasion of Ukraine, sanctions, and other potential impacts on this region’s economic environment and currencies may cause demand for our products and services to fluctuate or customer projects to be delayed, impact our ability to supply or source products from this geographic region, or limit certain customers’ ability to satisfy obligations to us. On May 2, 2022, one of the Company's customers announced that it had terminated a contract with a Russia state-owned entity to build a nuclear power plant in Finland. Also, we have experienced delays in revenue recognition for the three month period ended March 31, 2022 due to export controls and other sanctions instituted to date. Additional contracts or projects may be subject to delays or terminations as the situation evolves. In addition, while none of these customers have asked for advanced payment refunds, they could seek to recover these payments depending on future developments. The Russian-Ukraine conflict may also escalate or expand in scope and the broader consequences of this conflict cannot be predicted, nor can we predict the conflict's ultimate impact on the global economy or our business, results of operations, and financial condition. The Russia-Ukraine conflict may also heighten other risks disclosed in our Annual Report on Form 10-K for the period ended December 31, 2021, including through increased inflation, limited availability of certain commodities, supply chain disruption, disruptions to our global technology infrastructure, including cyber-attacks, increased terrorist activities, volatility or disruption in the capital markets, and delays or cancellations of customer projects, each of which could materially adversely affect our business, results of operations, and financial condition.

Filed May 5, 2022.
Source: SEC EDGAR, the filing index for accession 0001628280-22-012399. Last ingested by Listed: Oct 27, 2026, 16:16 ET. No prices; not investment advice.